Mortgage blog: New mortgage rules likely to bring ‘teething problems’

Posted 25 April 2014 by Keith Osborne

If you're going to be applying for a new mortgage in the next few weeks you could face a three-hour appointment, processing delays and ‘invasive' questioning about your spending habits. New rules governing mortgage lending come into effect this April and require borrowers to prove more than ever that they will be able to afford their new home loan.

As the new regulations take hold, a leading expert has admitted there could be ‘teething problems' as lenders get to grips with the new requirements.

New reforms come into force tomorrow

The reforms are to be introduced by the Financial Conduct Authority (FCA) this April and will see people applying for a mortgage questioned on their weekly food bill, the cost of childcare and even the cost of their gym membership.

The changes are designed to make lending more responsible and to avoid the irresponsible behaviour that led to the banking crisis in 2008. Whereas in the past you may have only had to provide payslips and bank statements, you will now have to account for all your monthly expenditure in order to prove that you can afford the mortgage.

The new rules could also mean it will take longer for your application to be processed as lenders are likely to require more documentation and evidence than ever before. Experts have also warned that getting an appointment with a mortgage lender could also be difficult and that once you are there your meeting could take three hours.

Homebuyers urged to prepared for rule changes

As the new rules come into force, some experts believe that it will be some time before all lenders get used to the changes. Martin Wheatley, chief executive of the Financial Conduct Authority, told the Daily Mail that the new regulations could suffer from teething problems, admitting the system would "probably not" be perfect to start with and there would be "some things we are going to have to think about again".

Keith Osborne, editor of, says: "It's clearly going to take some time for lenders to get up to speed with the new rules. In the meantime there are likely to be processing delays and borrowers are going to have to answer some quite intrusive questions about their financial arrangements.

"My concern is that some borrowers will lose their property simply because of the delays that are likely to occur. If you are thinking of buying a home, I'd recommend speaking to a lender as soon as possible and getting your mortgage agreed in principle. It's also advisable to assemble every last piece of documentation your lender might need, from the last six months bank statements to identification and proof of earnings."

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